Over the past 20 years, the NABERS system has seen savings in energy of $870m and 6 million tonnes of CO2 emissions – enough to power 93,430 homes for 1 year. The system now covers 78% of Australia major office buildings and has also expanded to cover Shopping Centre assets.
NABERS have now published a Sustainable Portfolio Index (SPI) which ranks Investment Managers and their Portfolios to see which groups are leading the way.
The NABERS SPI provides comparative business intelligence on where property portfolios stand against their peers and provides a complement to popular ESG indicators for investors. The NABERS SPI showcases all the property portfolios who are making the sustainability improvements promised in their policy documents. This year a total of 40 portfolios were rated, up 48% on last year with Charter Hall, Growthpoint and Investa joining the process.
The ranking, which is based on the portfolio's Star Ratings and the total percentage of the portfolio that is rated and account for the NLA of the various buildings in the portfolio. The rating is separated into Office and Retail assets.
Top Office Portfolios
CBUS, Local Government Super and Charter Hall Long WALE REIT have the best Office Energy Portfolio Ratings, whilst Barangaroo International Towers, Brookfield and Charter Hall Long WALE REIT come out on top for Water efficiency.
This year NABERS have also reported on Air Quality and Waste for Office Portfolios with Brookfield and BArangaroo on top for Air Quality and Frasers, CBUS and GPT on top for Waste.
Top Retail Portfolios
Local Government Property Fund's portfolio, top the list for Energy ratings in the Shopping Centre sector with Stockland in second place and Lendlease 3rd. For Water Ratings, Local Government Property Fund also came out on top with Lend Lease Sub Regional Fund in 2nd and its Prime Property Fund in 3rd.
Carlos Flores, Director, NABERS said, "each portfolio participating in this year’s Index is leading the world in disclosing their environmental performance openly and transparently. They embody the leadership needed to get to net zero emissions: they disclose their environmental footprint, set ambitious improvement targets and work hard to achieve them."
In a move to help close the gap between intention and action, NABERS has partnered with Net Zero Momentum Tracker, an initiative of ClimateWorks Australia and Monash Sustainable Development Institute, to show companies commitments to Net Zero.
The tools are becoming increasingly useful to investors who value quality consistent data on the performance of investment managers and their efforts to reduce carbon emissions.
Anthony De Francesco, Managing Director of Real Investment Analytics (RIA), an independent data analytical consulting firm, explains: “There appears to be a strong positive relationship between a high NABERS rating and enhanced investment performance for office property assets: generally reflected in improved property values, lower vacancies, firmer capitalisation rates, and longer weighted average lease expiry (WALE)”.
“NABERS ratings provide an additional metric in evaluating performance of existing property investments but can also be used to identify opportunities for portfolio growth by targeting office buildings with a lower NABERS rating,” says De Francesco.
Key sustainability finance players also see the NABERS SPI as being valuable in driving a more sustainable built environment. “NABERS ratings are a valuable way for the property sector to demonstrate best-in-class performance around energy efficiency, providing a clear pathway to a low emissions property portfolio. We see the NABERS Sustainable Portfolios Index as an important tool for investors in the property sector who are increasingly focused on supporting a more sustainable built environment,” says Sebastian Loewensteijn, the Associate Director at The Clean Energy Finance Corporation.
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